Investment Appraisal 0.0 / 5 ? Business StudiesInvestment AppraisalOtherOther Created by: Dieu Linh DaoCreated on: 13-05-18 01:37 Investment Appraisal attempts to assist the evaluation of the financial position of projects which have been proposed by a business activity 1 of 6 Payback the length of time it will take the business to repay its initial capital expenditure 2 of 6 Payback (formula) (remaining initial investment cost to recover x12) / net cash flow of the period its pay back 3 of 6 Average Rate of Return (ARR) the average annual profit of a project as a percentage of the initial capital investment. the project with the highest ARR will be selected 4 of 6 ARR (%) - formula (net return - profit per annum x100) / capital outlay. CFF(last yr) : no of yr / Capital outlay 5 of 6 Net Present Value (NPV) uses discount ratite discount the value of money 6 of 6
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